All Forum Posts by: Marcy Moyer

@Matt Dines. If the successor trustees were to just inherit the property and not sell to anyone I believe that the step up basis would be 3million and the property taxes would remain the same. The basis for the sale in the future would be 3 million dollars, the appraised value at time of death. Since 1/3 is being sold off, and the home is becoming a rental the situation is not straight forward. I can give you the name of a good tax accountant who is familiar with inheritance issues if you message me. 

You are welcome! I have been a home owner for decades, but an investor for 18 years. I just started to cash flow positive last year after all my mortgages were paid off, but I have made multiple millions in appreciation. That is where the big money is in California.

@Account Closed there is actually a pretty easy and free way to get the answer to your question as to what you can do. If your realtor used the CAR (California Association of Realtors)  form for the application and the lease. the application says the applicant represents that all information is true. It does not say what the remedy is if they are lying. Ask your realtor to call the CAR legal hotline and ask the CAR lawyer what your rights are. This is free to all CAR members. I am sure this is not the first time this has happened and there are legal cases that have determined what the remedy is for lying on a rental application.

In California, if you can get a neutral cash flow you are ahead of the game. Not only are you going to get 2 mortgages paid off you will also benefit from appreciation on 2 properties instead of 1. Most California investors make money on appreciation rather than cash flow, even when a property is owned free and clear. It is not unusual for a property to have a 3 to 4% cap rate but 5-10 % appreciation per year.

On my calendar. So sorry I got stuck dealing with some import business last week.

I think that investors should act like they are working towards 20 mil from the beginning. So if you start with 100K you use that as a downpayment on a 400K investment and go from there. In the early years of my investing I had 200K for down payments, took out mortgages and bought multiple residential rental properties in Redwood City and Santa Santa Cruz. When I came into some cash I bought a rental for all cash and started getting some positive cash flow. As most of you probably realize the Silicon Valley has bad CAP rates, but amazing appreciation. In 18 years the mortgages are paid off and I have enough equity to feel ok with 3-4% CAP rates on what I have while my children can take advantage of the wonderful appreciation we have here. If I wanted 20 million in equity I would have done it the same way. Buy with neutral cash flow, have mortgages paid off when I hit about 1/2 my goal equity and let it ride while collecting the income. I personally don't have as much faith in commercial buildings since the world is going virtual and away from brick and mortar, retail is not doing well, and many professionals are leaving single professional businesses and going into large practices.

@Glenn Gayet I can not speak for the other cities but San Jose is booming. Retail is doing great although labor shortages make it hard on the business owners. The housing costs are high so lower payed employees do have a harder time finding a place to live. Are you planning on buying commercial property here. If so retail? Any questions about the area I would be happy to answer if I can. 

In Silicon Valley/Bay area you will need at least 40% down to cash flow.

@Jeremy Lee there are a lot of things to consider here so speaking with a tax planner is a very good idea to get answers on your parents' particular situation. I have a few more facts you can put in the mix, but this is not tax advice and I am not an accountant.

1. In general, if you sell an investment property in California there is a 20% long term Fed cap gain tax plus a 13% state capital gains tax. The 3.8 ACA tax on the sale of investments has been repealed. So 33% of the gain can be taxed. Check with tax person.

2. It is possible your parents could gift it to you and subtract that from the total amount you would inherit when they pass. If they do that you can also keep their property tax basis. Find out if this applies to you. 

3. If they or you hire a property manager the cost will easily be made up by bringing the rent up to market value and it becomes less of a headache.

4. Property tax on a rental property is considered and expense and not part of the SALT changes. It is still fully deductible. Check with a tax person.

Ok, now here are some things to be careful about.

1. Alameda is geologically sensitive and low lying. There could be a lot of damage in an earthquake. If you or your parents keep it it would be prudent to make sure you have plenty of additional insurance in addition to what the HOA has incase the building is damaged.

2. There have been a lot of little rumblings on the Hayward Fault recently. It is a question of when there is another large earthquake not if.

3. Alameda is beautiful and condos are selling rapidly right now. This may not always be the case.

4. It is more difficult to get to the city or other east bay cities due to no BART stops. The low inventory right now makes that less important than it could be if there is a market correction.

Your family may not want this condo, but there are plenty of other people right now who would

Just my 2 cents.

@Louis W. if the home is suitable for a family the best time is the summer when school is out. If it is near a University the best time is the month before school starts. If neither of those apply and you are sure you are not over priced then maybe you are not getting enough exposure. Internet marketing is essential and there are some sites that are really helpful to be on. However, the pictures of the house must be good and the availability of showings generous.